As somewhat-prodigal Twitter co-founder Jack Dorsey prepares to fully return to that company, moving from chairman to CEO, the ramifications for Square, the mobile payments company Dorsey also founded and where he currently serves as CEO, are anyone's guess. Or, for that matter, everyone's. While Forbes predicts that Square will IPO this year, the Mercury News claims Square will instead be sold.
Questions are flying in relation to last week's big announcement that Twitter CEO Dick Costolo will step down with Dorsey to take the helm until a new CEO is chosen by an international search committee. Flying down a number of hypothetical rabbit holes, most of them to do with Twitter, pundits are also focused on Square and Dorsey's future role there.
You're no doubt familiar with that company's services even if you're mostly unaware of their business. Square's small plastic card readers, attached to mobile devices like iPhones and iPads, are ubiquitous at counters and other points of sale. Yet the company faces a crowded payments market and new mobile payment competitors, all while reportedly operating at a loss of between $110 million to $120 million annually, with much of its $500 million annual revenue depleted by fees paid to the likes of Visa.
With all that in mind, "It's been the case for at least two or two and a half years now that Square has tried to position itself to get sold," Sam Hamadeh, founder and CEO of PrivCo, told the Merc. That company acts as a financial data provider on major privately held companies. "Everyone in M&A knows that they are shopping the company around. They are really hoping someone like Google steps up and buys them, they are praying for that, because the financials are horrific." Other possible suitors might include Visa, Citi, Apple, Google, PayPal, Amazon and Intuit, to name just a few.
But meanwhile, unnamed sources tell Forbes that “The plan is to [IPO] this year,” and a “confidential” registration will be filed, and it's "going to happen soon, if it hasn’t happened already." Earlier in the week Square launched a new credit card and phone reader to assist businesses in accepting Apple Pay, a newish mobile payments service, and new EMV chip credit cards.
It's possible that Dorsey — who founded Twitter in 2006 in part based on his work on a web dispatch company for couriers, taxis, and emergency vehicles in Oakland — is angling for a permanent post back as Twitter CEO, or so the Business Times speculates. That's probably because, as most would agree, Twitter is the more interesting property of the two.
But for now, Dorsey is set to split his time between the companies as he begins at Twitter on July 1. “I am grateful for the talented team at Square, which I will continue to lead,” he said in a press release last Thursday. “We have built a very strong company from top to bottom, and I am as committed as ever to its continued success.”